For this month's ATOM AotM, we visit the medical industry, and examine a technology that seems quite intuitive, but on account of patents and other obstacles, has seen rapid improvement greatly delayed until now.

Surgery seems as though robotics would be ideally suited for it, since it combines complexity and precision with a great deal of repetition of well-established steps. The value of smaller incisions, fewer instances of bones being sawed, etc. is indisputable, from qualitative measures such as healing pain, to tangible economic metrics such as hospital stay duration post-surgery.

Intuitive Surgical released its Da Vinci robot to the market in 2001, but on account of Intuitive's patents, they sustained a monopoly and did not improve the product much over the subsequent 17 years. Under ATOM principles, this is a highly objectionable practice, even if technically they can still earn a high profit margin without any product redesigns. As a result, only 4000 such robots are currently in use, mostly in the US. Intuitive has achieved a market capitalization of over $60 Billion, so it has succeeded as a business, but this may soon change. Now that Intuitive's patents are finally close to expiry, a number of competitors are ready to introduce ATOM-consistent exponential improvements into the competitive landscape.

The Economist has a detailed article about the new entrants into this market, and the innovations they have created. In addition to mere cost-reduction due to smaller electronics, one obvious extension of the robotic surgery model is for each robot to be connect to the cloud, where the record of each surgery trains an Artificial Intelligence to ensure ever-improving automation for several steps of the surgery. With AI, greater usage makes it improve, and when thousands of surgeries around the world are all recorded, that makes each machine simultaneously better. As costs lower and unit volume increases, the volume of data generated rises. As the accumulation of data rises, the valuation of companies capturing this data also rises, as we have seen in most other areas of technology.

This level of data combined with greater circuitry within the robot itself can also increase the speed of surgery. When more of it is automated, and the surgeon is doing less of the direct manipulation, then what is to prevent surgeries from being done at twice or thrice the speed? This enables a much shorter duration of anesthesia, and hence fewer complications from it.

One table that I use relatively often is the one that depicts relative GDP gain by country, and have in the past used it to describe how the 2008-09 crisis led to the rebound happening elsewhere. Google has just updated its economic data engine for 2017, enabling a full decade to be included from the start of the prior crisis. This enables us to see what happens when the global economy experiences a major dislocation. The Great Depression (1929-39) was one such dislocaton, and while the trendline is too steep today for a downturn of similar duration to manifest in the global economy, the more recent dislocation was almost as dramatic in terms of how it reoriented the tectonic plates of the global economy.

From the table, we see that the World Economy grew by 40% in Nominal GDP. We do not adjust for inflation in these metrics for reasons detailed in the ATOM publication, and we take the US$ metric as universal.

The US, remarkably, did not grow at a much slower rate than the world average, and hence has not yet experienced a substantial proportional shrinkage. By contrast, the rest of the advanced world has scarcely grown at all, while European economies have outright shrunk. An advanced country, of course, does not have the same set of factors to contend with as an emerging economy that is at a stage where high growth is easier, hence this is really two tables in one. India's underperformance relative to China is just as substandard as the UK's underperformance relative to the US.

China has effectively dominated the entire world's growth. China has grown at an astounding 245%, partly due to a structural strengthening of its currency, which itself is partly due to their more advanced understanding of technological deflation and the monetization of such through their central bank (as per the ATOM concepts). India has not experienced any such strengthening of its currency (quite the opposite, in fact), which is why India's economy has grown at a far slower rate despite starting from a very low base.

Consider this other chart, of GDP distribution by country (as per the current borders) from the year 1 until 2017. The growth of China (and to a lesser extent, India) appears to be a reversion to a status quo that existed from the dawn of civilization all the way until the early 19th century. If this factor is combined with the exponential trend of world growth, then China's current outperformance seems less like an aberration.

This begs the question of what the next decade will look like. There is almost no chance that China can outperform the RoW by the same magnitude from this point onwards, simply due to the RoW no longer being large enough to manage the same intake of Chinese exports relative to China's size as before. But will the convergence take the form of China slowing down or the RoW speeding up? Will India experience the same convergence to pre-19th century proportional size, or is India a lost cause?

Under the ATOM program, it could certainly be the latter, since the advanced economies already have enough technological deflation that they can monetize it through central bank monetary creation. China, by contrast, will not be technologically dense enough for it until 2024 or so. The US could rise to 5-6%/year Real GDP growth by 2025.

The current mindset in the Economics profession is vastly outdated, and there is little to no curiosity about accelerating economic growth rates, or about the relationship between technological deflation and central bank monetary action. If China can no longer be an outlet to accommodate the entirety of the trendline reversion force that is seeking to work around these obstructions, then explosive growth combined with chaotic disruption will happen somewhere else.

For the May 2018 ATOM AotM, we will visit a technology that is not a distinct product or company, but rather is a feature of consumer commerce that we would now find impossible to live without. This humble yet indispensable characteristic of multiple websites has saved an incalculable amount of frustration and productivity loss. I am, of course, referring to web-based reviews.

Lest you think this is a relatively minor technology to award an ATOM AotM to, think again, for a core principle of technological progress is that a technology is most successful when it is barely even noticed despite a ubiquitous presence.

Part of what has enabled eCommerce to siphon away an ever-rising portion of brick and mortar retail's revenue is the presence of reviews on sites like Amazon. Beyond eCommerce, sites like Yelp have greatly increased the information access of consumers seeking to patronize a low-tech business, while media sites permit a consumer to quickly decide which films and video games are worthwhile without risking a blind purchase. While false reviews were a feature of the early Internet for over a decade, now there is considerable ability to filter those out.

I recall a frustrating episode that a friend and I experienced in 1999. We wanted to rent a film from Blockbuster videos, but did not know which one. We found one that had familiar actors, but the movie was extremely subpar, resulting in a sunk cost of the rental fee, transportation costs, and time spent on the film and two-way transit. When returning to Blockbuster to discharge the VHS Cassette of the film, we selected another, based on the same criteria. It was even worse. We had rented two separate films over two separate round trips to Blockbuster, only to be extremely unsatisfied. Movie review sites like IMDB did exist at the time, but my friend did not have home Internet access (as his Internet activities were restricted to his workplace, as was common at the time).

Now, in this anecdote, just list the number of ATOM disruptions that have transpired since :

There is no longer a 'Blockbuster Video' that rents VHS Cassettes, as films are rented online or available through a Netfilx subscription.

Everyone has home Internet access, and can see a film's reviews before ever leaving home.

Hence, it is no longer possible to waste hours of time and several dollars on a bad film. The same goes for restaurants, and in this case, both the consumer and the business are shielded from an information mismatch on the part of the consumer. I have always felt that it was unfair for a patron to judge a restaurant negatively if they themselves did not order what they might have liked. Now, with Yelp, in addition to reviews, there are pictures, enabling a vastly more informed decision.

Even higher-stakes decisions, such as the selection of a dentist or auto-mechanic, has slashed the uncertainty that people lived under just 12 years ago. The better vendors attract more business, while substandard (or worse - unethical) vendors have been exposed to the light of day. This is a more powerful form of quality control than has ever existed before.

Now, to see where the real ATOM effects are found, consider the value of the data being aggregated. This drives better product design and better marketing. This also expands the roadmaps of accessory products or complementary products. The data itself begins to fuel artificial intelligence, for remember that any pile of data of sufficient size tends to attract artificial intelligence to it. This leads to a lot of valuable analytics and automation.

If one were to rank the primary successful Internet use cases to date, the ability to see reviews of products and services would rank very high on the list. For this reason, this receives the May 2018 ATOM AotM.

In the ATOM publication, we examine how the only way to address the range of seemingly unrelated economic challenges in a holistic manner is to monetize technological deflation. For reasons described therein, the countries best suited to do this are small countries with high technological density. Furthermore, we examine the importance of the first-mover advantage, where when a country can monetize the technological deflation in the rest of the world for the benefit of their domestic economy, the first $1 Trillion is practically free money.

In Chapter 10, I outline a systematic program for how the US could theoretically transition to this modernization of the economy. But I then identify the four countries that are much more suitable than the US. These are two Western democracies (Canada and Switzerland) and two Pacific-Rim city states (Singapore and Hong Kong). But it is possible to create custom solutions for more countries as well. To determine how to do that, let us go back to a seminal event in the emergence of these ideas.

What Japan Discovered for the Benefit of Humanity : Few people have any awareness of what an important event happened in April of 2013. Up to that time, the US was the only country that had embarked on a program to engineer negative interest rates through monetary creation (rather than the punitive and reductive practice of deducting from bank accounts). Japan decided that after two decades of stagnation and extremely low interest rates, something more drastic and decisive had to be done. The early success of the US Quantitative Easing (QE) program indicated that a more powerful version of this could be effective against the even worse stagnation that Japan's economy was mired in.

In April of 2013, the Bank of Japan (BoJ) decided to go big. They embarked on a program of monetary easing in the amount of 30% of their annual GDP. This was a huge upgrade over the US QE programs for two reasons. Firstly, it was much larger as a proportion to the host nation's GDP, and secondly, it had no end date, enabling long-term decisions. Since the formal economics profession in the West is burdened by a wide range of outdated assumptions about money printing, inflation, and technology, the Western Economists yet again predicted high inflation. And yet again, they were wrong. There was no inflation then at the start of the program. Japan had correctly called the bluff of the inflation specter. The third-largest economy in the world could print 30% of its GDP per year for five years, and still experience no inflation. When I observed this, I drew the connection between technological deflation (worldwide) and the vanishing QE (also worldwide). Most of Japan's QE was flowing outside of Japan (and indeed into the US, which had long since stopped QE, and has forestalled a major market correction only by drawing from overseas QE, mainly from Japan). Hence, the combined QE of the world was merely offsetting the technological deflation worldwide. Japan's big gambit proved this, and in doing so, they showed us how much QE can be done before world inflation even hits 3% (i.e. much more than formal economists thought).

What is a Small, Prosperous Country to do? While it is always better to be a prosperous country than an impoverished one, almost every small country (the size of Canada or smaller) is faced with a major vulnerability in the modern economy. Their economy invariably depends on one or two major industries, and is hence vulnerable to a technological disruption that arises from somewhere else in the world. The need to diversify against such external risks is obvious, but most countries are not on the best path to achieve this goal.

These days, everyone I meet from the government of some foreign country seems to have the same goal for their country - to create an ecosystem of local technology startups. This goal is not just extremely difficult to attain, but it is very misguided. Technology is becoming increasingly governed by winner-take-all dynamics and capital concentration, which means even in the US, rival cities are unable to compete with Silicon Valley (which itself has concentrated into a smaller portion of the San Francisco Bay Area than was the case in the late 1990s). Small countries with technology sectors, such as Israel and Singapore, started decades ago and have a number of unique factors in their favor, including a major Silicon Valley diaspora. Hence, a country that thinks it is productive to create a tech startup cluster in their countries will almost certainly create a situation where young people receive training at local expense, only to leave for Silicon Valley. So these initiatives only end up feeding Silicon Valley at the expense of the original country. Even if a few tech startups can be forcibly created in the country, it is extremely unlikely that they will achieve any great size within even 15 years.

Take, for example, a country like New Zealand. It has many favorable characteristics, but certain disadvantages as well in an increasingly globalized economy. It relies on agricultural and dairy exports, as well as the film industry and tourism. It is too remote to easily plug into the well-traveled routes of tech executives (less than 30M people live within 3000 miles of New Zealand) or major supply chains. It is too small to be a significant domestic market for tech (particularly when a functional tech ecosystem has to comprise of startups in multiple areas of tech in order to achieve rudimentary diversification). New Zealand's success in getting Hollywood films shot in New Zealand cannot similarly translate into getting some Silicon Valley business, as an individual film project has a short duration and distinct ending, with key personnel on site for just a brief period. Technology, by contrast, is inherently endless, and requires interdependency between many firms that have to have co-location. Furthermore, no society is capable of placing more than 1-2% of its population into high-tech professions and still have them be competitive at the international level (most tech innovation is done by people in the top 1% of cognitive ability). For this reason, a tech startup ecosystem does not create broad prosperity (it is no secret that even within Silicon Valley, only a fraction of people are earning almost all the new wealth. Silicon Valley has among the most extreme inequality found anywhere).

Now, from the research contained in the ATOM publication, we know that there is a far easier solution that can deliver benefits in a much shorter time. New Zealand's fiscal budget reveals that as of 2018, it collects about $80 Billion in taxes and spends the same $80B per year. The world was recently generating $200B/month in QE and is still doing an insufficient $120B/month. The entire annual budget of New Zealand is well below one month of the world's QE - the QE that is needed just to halt technological deflation. It would be very easy for New Zealand to waive all income taxes, and merely print the same $80B/year from their central bank. A brief transition period can be inserted just to soften the temporary downgrades that international rating agencies deliver. But the waiver of income tax will boost New Zealand's economy with immediate effect. It can even enter and dominate the lucrative tax-haven industry until other countries adopt the same strategy.

Now, it is difficult for government officials, legislators, and statesmen to take such a drastic step, particularly when the entire Economics profession is still mired in outdated thinking about how QE will someday, somehow cause inflation (despite being wrong about this for 9 years and over the course of $20 Trillion in cumulative world QE). For this reason, a second, less drastic option is also available for New Zealand. That involves create what I describe as a Sovereign Venture Fund, where the New Zealand Central Bank creates a segregated account that is completely partitioned off from the domestic economy, and prints money to place into that account (say, $100 Billion). It is crucial that this money not circulate domestically at first, as it would cause inflation. The purpose of this $100B Sovereign Venture Fund is to invest in startups worldwide that might be disrupting New Zealand's domestic industries. This model is extremely effective and flexible, as :

i) The money was not taken from New Zealand taxpayers, but rather generated for free by the New Zealand Central Bank. Hence, it can invest in speculative startups across the world with far more boldness.

ii) The diversification achieved is immediate, and can always be adjusted with equal immediacy as needed.

iii) The Fund is leveraging the rest of the world's technological deflation for New Zealand's domestic benefit.

iv) Tech startups worldwide become extremely vocal advocates for the fund, and even the country itself. It boosts New Zealand's branding (generating even more tourism).

v) Fund gains can be used to offset government spending by replacement of income tax, or to fund training to enable citizens to modernize their skills. It can also provide a greater social safety net to cushion industries buffeted by disruption, but without taxing those who are still working. This is how to repatriate the money without inflation.

vi) Even a larger fund of $800B can earn $80B/year from a 10% return, which exceeds the total taxes collected by the country.

The Sovereign Venture Fund is an extremely effective, speedy, and versatile method of economic diversification. It can be customized for any prosperous country (for example, an oil exporter should simply invest in electric vehicle, battery, and photovoltaic technologies to hedge their economic profile). As a huge amount of worldwide QE has to be done just to offset technological deflation, there is no contribution to inflation even worldwide, let alone domestically. As the winds of technological change shift, the Fund can respond almost immediately (unlike a multi-decade process of creating a tech startup ecosystem only to worry if the sectors represented are about to be disrupted).

Since there is a very high and exponentially rising ceiling of how much world QE can be done before world inflation reaches even 3% (about $400B/month in 2018, as per my calculations), there is an immense first-mover advantage that is possible here. The first $1 Trillion is effectively 'free money' for the country that decides to be Spartacus.

New Zealand, in particular, has even more factors that make it a great candidate. The NZ$ is currently too strong, which is crimping New Zealand's exports. This sort of program may create a bit of currency weakening just from the initial reaction. For this additional reason, it is a low-risk, high-return strategy for generating a robust and indeed indestructible safety net for New Zealand's citizens, hedging them from the winds of global technological disruption.

For this month's ATOM AotM, we will address the sector that any thought leader in technological disruption recognizes as the primary obstruction to real progress. When we see that sectors that are overdue for disruption, such as medicine, education, and construction all happen to be sectors with high government involvement, the logical progression leads us to question why government itself cannot deliver basic services at comparable costs to private sector equivalents.

As just one example out of hundreds, in California and other high-tax states, the annual license plate registration can cost $400/year. What does the taxpayer truly receive? The ability to trace license plates to driver's licenses and insurance. Why should such a simple system cost so much? It seems that it should only cost $2/year under 2018 technological levels. By contrast, note how much value you receive from a $96/year Netflix subscription. By all accounts, many basic government services could easily implement cost reductions of 98-99%.

While the subject of government inefficiency vs. the ATOM is perhaps the primary topic of this website and the ATOM publication, just one small example across the world demonstrates what a modernized government looks like. The tiny country of Estonia contains just 1.3 million people. A desire to catch up from decades of being part of the Soviet Union perhaps spurred them into a unique desire to modernize and digitize government services into a state that Americans would scarcely believe could exist. Here are some articles by publication about Estonia's successful digitization, where you can read about specific details :

Estonia has also taken early steps towards certain ATOM realities. While it does have high consumption taxes, income tax is a flat 21%, thereby saving immense costs in complexity and processing (which cost the US over $700 Billion/yr). If only it figures out the ATOM principles around monetization of technological deflation, it could reduce income taxes to zero.

Now, for the unfortunate part. When a country manages to produce a product or service that the rest of the world wants and cannot produce at the same quality and price themselves, the first country can export the product to the outside world. From Taiwanese chipsets to South Korean smartphones and television sets to Italian cheeses, the extension of sales to exports is straightforward. Yet in the governance sector, despite being a third of the world economy, Estonia has no market where it can sell its services to hasten the digitization of other governments. Whether at the Federal, State, City, or County level, the United States has hundreds of governments that could simply hire Estonian consultants and implementation staff to rapidly install new services. This could be lucrative enough to make Estonia a very wealthy country, and then attract competition from other countries (such as nearby Finland, which is attempting to follow Estonia's path). Yet, unlike a private sector product or service, governance just does not value efficiency or productivity to this extent. The State of California alone could save billions of dollars per year, and either spend the taxes on other things, or (preferably) pass the savings on to the taxpayers.

Before long, the ATOM will force even the largest nation states to improve their productivity of government services. But that process will be messy, and government officials may take a scorched-earth approach to defending their own rice bowls. Let us hope that Estonia inspires at least a few other countries into voluntary modernization.

With the new year, we have a new ATOM AotM. This is an award for a trend that ought to be easy for anyone to recognize who is at all familiar with Moore's Law-type concepts, yet is greatly overlooked despite quite literally being in front of people's faces for hours a day.

The most crude and uninformed arguments against accelerating technological progress are either of a "Word processing is no better than in 1993, so Moore's Law no longer matters" or "People can't eat computers, so the progress in their efficiency is useless" nature. However, the improvements in semiconductor and similar technologies endlessly finds ways into previously low-tech products, which is the most inherent ATOM principle.

The concept of television has altered cultures across the world more than almost any other technology. The range of secondary and tertiary economies created around it are vast. The 1960 set pictured here, for $795, cost 26% of US annual per capita GDP at the time. The equivalent price today would be $15,000. Content was received over the air and this was often subject to poor reception. The weight and volume of the device relative to the area of the screen was high, and the floorspace consumed was substantial. There were three network channels in the US (while most other countries had no broadcasts at all). There was no remote control.

There were slow, incremental improvements in resolution and screen-size-to-unit-weight ratios from the 1960s until around 2003, when one of the first thin television sets was available at the retail level. It featured a 42" screen, was only 4 inches thick, and cost $8000. Such a wall-mountable display, despite the high price, was a substantial improvement above the cathode ray tube sets of the time, most of which were too large and heavy to be moved by one person, and consumed a substantial amount of floor space.

But in true ATOM exemplification, this minimally-improving technology suddenly got pulled into rapid, exponential improvement (part of how deflationary technology increased from 0.5% of World GDP in 1999 to 1% in 2008 to 2% in 2017). Once the flat screen TV was on the market, plasma and LCD displays eventually gave way to LED displays, which are a form of semiconductor and improve at Moore's Law rates.

Today, even 60-inch sets, a size considered to be extravagant in 2005, are very inexpensive. Like any other old electronic device, slightly out of date sets are available on Craigslist in abundance (contributing to the Upgrade Paradox). A functional used set that cost $8000 in 2003 can hardly be sold at all in 2018; the owner is lucky if someone is willing to come and take it for free.

Since once ATOM-speed improvements assimilate a technology, the improvements never stop, and sets of the near future may be thin enough to be flexible, along with resolutions of 4K, 8K, and beyond. Sets larger than 240" (20 feet) are similarly declining in price and visible in increasing numbers in commercial use (i.e. Times Square everywhere). This is hence one of the most visible examples of ATOM disruption, and how cities of today have altered their appearance relative to the recent past.

This is a large ATOM disruption, as there are still 225 Million new sets sold each year, amounting to $105 Billion/year in sales.

I have been selected to teach a class at Stanford Continuing Studies, titled 'The New Economics of Technological Disruption'. For Bay Area residents, it would be great to see you there. There are no assignments or exams for those who are not seeking a letter grade, and by Stanford standards, the price ($525 for an 8-week class) is quite a bargain.

For this month, the ATOM AotM goes to an area we have not visited yet. Enterprise software and associated hardware technologies may appear boring at first, but there is currently a disruption in this area that is generating huge productivity gains.

loud computing itself is relatively new, but this revolution by Amazon as taken direct slices out of the existing businesses of Microsoft, IBM, and Oracle, which were slow to deploy cloud-based solutions since they wanted to extend the lives of their existing product lines. Their anti-technology behavior deserves to be punished by the ATOM, and Amazon obliged. AWS is set to register $14 Billion in revenue for 2017, most of which has replaced a greater sum of revenue at competing companies.

The biggest value is the lower cost of entry to smaller companies from the on-demand flexibility enabled by AWS. Now that IT Security and Compliance is far more cost-effective through AWS, the barrier to entry for smaller firms is lowered. This is particularly useful for clients in far-flung locations, enabling a decentralization that facilitates greater technological progress. Upgrades across computing, storage, software, networking, and security are disseminated seamlessly, and since far less hardware is used, the upgrade process is far more materially efficient. This removes a variety of smaller bottlenecks to technological progress, mitigating the corporate equivalent of the Upgrade Paradox.

Another great benefit is elasticity, where a company does not have to worry about estimating hardware capacity needs in the future, which can often lead to overbuying of rapidly deflating technologies, or underbuying, which can cause customer dissatisfaction due to slow speeds. All of this can now be scaled dynamically through AWS.

For the productivity gains inherent to the scale and dynamism of AWS, it receives the October 2017 ATOM AotM.

For September 2017, the ATOM AotM takes a very visual turn. With some aspects of the ATOM, seeing is believing.

Before photography, the only image capture was through sketches and paintings. This was time-consuming, and well under 1% were prosperous enough to have even a single hand-painted portrait of themselves. For most people, after they died, their families had only memories via which to imagine faces. If portraits were this scarce, other images were even scarcer. When image capture was this scarce, people certainly had no chance of seeing places, things, or creatures from far away. It was impossible to know much about the broader world.

The very first photograph was taken as far back as 1826, and black&white was the dominant form of the medium for over 135 years. That it took so long for b&w to transition to color may seem quite surprising, but the virtually non-existent ATOM during this period is consistent with this glacial rate of progress. The high cost of cameras meant that the number of photographs taken in the first 100 years of photography (1826-1926) was still an extremely small. Eventually, the progression to color film seemed to be a 'completion' of the technological progression in the minds of most people. What more could happen after that?

But the ATOM was just getting started, and it caught up with photography around the turn of the century with relatively little fanfare, even though it was notable that film-based photography and the hassles associated with it were removed from the consumer experience. The cost of film was suddenly zero, as was the transit time and cost from the development center. Now, everyone could have thousands of photos, and send those over email endlessly. Yet, standalone cameras still cost $200 as of 2003, and were too large to be carried around everywhere at all times.

As the ATOM progressed, digital cameras got smaller and cheaper, even as resolution continued to rise. It was discovered that the human eye does in fact adapt to higher resolution, and finds previously acceptable lower resolution unacceptable after adapting to higher resolution. Technology hence forces higher visual acuity and the associated growth of the brain's visual cortex.

With the rise of the cellular phone, the ATOM enabled more and more formerly discrete devices to be assimilated into the phone, and the camera was one of the earliest and most obvious candidates. The diffusion of this was very rapid, as we can see from the image that contrasts the 2005 vs. 2013 Papal inaugurations in Vatican City. Before long, the cost of an integrated camera trended towards zero, to the extent that there is no mobile device that does not have one. As a result, 2 billion people have digital cameras with them at all times, and stand ready to photograph just about anything they think is important. Suddenly, there are countless cameras at every scene.

But lest you think the ubiquity of digital cameras is the end of the story, you are making the same mistake as those who thought color photography on film in 1968 was the end of the road. Remember that the ATOM is never truly done, even after the cost of a technology approaches zero. Digital imaging itself is just the preview, for now we have it generating an ever-expanding pile of an even more valuable raw material : data.

Images contain a large volume of data, particularly the data that associates things with each other (the eyes are to be above the nose, for example). Data is one of the two fuels of Artificial Intelligence (the other being inexpensive parallel processing). Despite over a decade of digital images being available on the Internet, only now are there enough of them for AI to draw extensive conclusions from them, and for Google's image search to be a major force in the refinement of Google's Search AI. Most people don't even remember when Google added image search to its capabilities, but now it is hard to imagine life without it.

Today, we have immediate access to image search that answers questions in the blink of an eye, and fosters even greater curiosity. In a matter of seconds, you can look up images for mandrill teeth, the rings of Saturn, a transit of Venus over the Sun, the coast of Capri, or the jaws of Carcharocles Megalodon. More searches lead to more precise recommendations, and more images continue to be added. In the past, the accessibility of this information was so limited that the invaluable tangents of curiosity just never formed. Hence, the creation of new knowledge speeds up. The curious can more easily pull ahead of the incurious.

Digital imaging is one of the primary transformations that built the Internet age, and is a core pillar of the impending ascent of AI. For this reason, it receives the September 2017 ATOM AotM.

For the August 2017 ATOM AotM, we will bend one of the rules. The rule is that a disruption already has to have begun, and be presently underway.

But this time, a conversation in the last month's comments brought forth a vision of a quad-layer disruption that is already in the early stages and will manifest in no more than 15 years time. When fully underway, this disruption will further tighten the screws on government bodies that are far too sclerotic to adapt to the speed of the ATOM.

To start, we will list out the progression of each of the four disruptions separately.

1) Batteries are improving quickly, and while electric vehicles are not yet competitive in terms of cost and charging speeds (partly due to the true cost of imported oil not being directly visible to consumers). At the same time, an electric car has far fewer moving parts, and fewer liquids to deal with. By many estimates, an electric car can last 300,000 before significant deterioration occurs, vs. 150,000 for an internal combustion engine car. Now, under the current ownership model, a car is driven only 12,000 miles/year and is parked 90% of the time or more. The second half of an electric vehicle's lifetime (150,001-300,000 miles) would only begin in year 13 and extend until year 25 of ownership, which is not practical. If only there were a way to avoid having the car remain idle 90% of the time, occupying parking spaces. It may take until 2032 for electric cars to compress the cost delta to the extent of being superior to ICE cars in total ownership costs for the early years, which then leads to the dividend available in the later years of the electric car's life.

2) Autonomous vehicles are a very overhyped technology. Stanford University demonstrated an early prototype in 2007. Yet even a decade later, a fully autonomous car that operates without any human involvement, let alone the benefit of having a network of such cars, seems scarcely any closer.

Eventually, by about 2032, cars will be fully autonomous, widely adopted, and communicate with each other, greatly increasing driving efficiency through high speeds and far less distance between cars than humans can manage. Uber-like services will cost 60-80% less than they do now, since the earnings of the human driver are no longer an element of cost, and Uber charges just 20-30% of the fare itself. It will be cheaper for almost everyone to take the on-demand service all the time, than to own a car outright or even take the bus. If such a car is driven 20 hours a day, it can in fact accrue 300,000 miles in just 5 years of use. This effectively is the only way that electric cars can be driven all the way up to the 300,000 limit.

3) The displacement of brick and mortar retail by e-commerce has far greater implications for the US than for any other country, given the excessive level of land devoted to retails stores and their parking lots. The most grotesque example of this is in Silicon Valley itself (and to a lesser extent, Los Angeles), where vast retail strip mall parking lots are largely empty, yet are within walking distance of tall, narrow townhouses that cost $1.5M despite taking up footprints of barely 600 sqft each.

As the closure of more retail stores progresses, and on-demand car usage reduces the need for so many parking spaces, these vast tracts of land can be diverted for another purpose. In major California metros, the economically and morally sound strategy would be to convert the land into multi-story buildings, preferentially residential. But extreme regulatory hurdles and resistance towards construction of any new housing supply will leave this land as dead capital for as long as the obstructionists can manage.

But in the vast open suburbs of the American interior, land is about to go from plentiful to extremely plentiful. If you think yards in the suburbs of interior cities are large, wait until most of their nearby strip malls are available for redevelopment, and the only two choices are either residential land or office buildings (there are more than enough parks and golf courses in those locations already). Areas where population is already flat or declining will have little choice but to build even more, and hope that ultra-low real estate costs can attract businesses (this will be no problem at all if the ATOM-DUES program is implemented by then).

This disruption is not nearly as much a factor in any country other than the US and, to a lesser extent, Australia, as other countries did not misallocate so much land to retail (and the associated parking lots) in the first place.

But remember, under ATOM principles, the more overdue a disruption is, and the more artificial the obstructions thwarting it, the more sudden it is when it eventually happens. China is not held back by the factors that have led to the abysmally low productivity in US construction, and when there is so much retail land to repurpose, pressure to revive that dead capital will just become too great, even if that means Chinese construction companies have to come in to provide what the US counterparts cannot. This pressure could be the catalyst of the long overdue construction productivity catchup. This topic warrants a lengthy article of its own, but that is for another day.

Hence, the first three factors, and possibly the fourth, combine by 2032 to generate a disruption that will be so comprehensive in the US that the inability of government to change zoning laws and permitting at anything close to the speed of market demand will be greatly exposed.

The first disruption, batteries, alone could be an ATOM AotM, but this time, the cumulative disruption from these multiple factors, even if it will take the next 15 years to accomplish, gets the award.

The ATOM AotM for July 2017 reminds us of the true core principles of the ATOM. Whenever anything becomes too expensive relative to value provided, particularly if done so through artificial government intervention in markets, a technological solution invariably replaces the expensive incumbent.

Taxi medallions, particularly in New York City, are just the crudest form of city government corruption. Drunk with its own greed, the city ratcheted up the price of taxi medallions from $200,000 in 2003 to $1M in 2013, which is far faster than even the S&P500, let alone inflation. Note how there was no decline at all during the 2008-09 recession. This predatory extraction from consumers, much like high oil prices artificially engineered by OPEC, created a market window that might otherwise have not existed until several years later. This induced the ATOM to address this imbalance sooner than it otherwise might have. and gritty entrepreneurs swiftly founded companies like Uber and Lyft, which provided a dramatically better value for money. As a result, the price of taxi medallions in NYC fell by 80% from the inflated peak. The ATOM was at a sufficiently advanced level for the technological response to be as rapid as it was (unlike with, say, expensive oil in the 1973-81 period, when there was almost no ATOM of macroeconomic significance).

Remember that the reduction in cost for a certain ride and demolition of a seemingly intractable government graft obstacle is just the first of several ATOM effects. The second is the security of each driver and passenger being identified before the ride. The third is the volume of data that these millions of rides generate (data being one of the two core fuels of Artificial Intelligence). The fourth is the ability to dynamically adjust to demand spikes (the surge pricing that the economically illiterate malign). The fifth is the possibility of new service capabilities altogether. Recall this excerpt from Chapter 11 of the ATOM :

Automobile commuters with good jobs but lengthy commutes have joined Uber-type platforms to take a rider along with them on the commute they have to undertake anyway. The driver earns an extra $200-$400/week (against which an appropriate portion of car and smartphone costs can be applied as deductions) with no incremental input time or cost. Meanwhile, other commuters enjoy having one less car on the road for each such dynamically generated carpooling pair. The key is that a dead commute is now monetized even by corporate-class people, increasing passengers per car and reducing traffic congestion, while replacing dedicated taxicabs. For the macroeconomy, it also creates new VM where none existed before.

The creation of an entirely new sub-economy, with entirely new velocity-of-money (VM), is where new real wealth creation is the purest. This effect of these ride-sharing platforms is still in its infancy. When autonomous vehicles replace human drivers, the loss of driver income is matched (indeed exceeded in post-tax terms) by savings to passengers.

It does not matter which company ultimately wins (Uber is having some PR problems lately), but rather that the disruption is already irreversible and woven into the fabric of the ATOM and broader society. Maybe Uber and Lyft will just be to transportation services what Data General and Commodore were to computing. The point is, this is a superb example of how the ATOM works, and how the transformation is often multi-layered.

For May 2017, the award goes in a direction that not many associate with technological disruption. Remember that the ATOM relates to not merely products that themselves have a rapidly improving cost/benefit profile, but also towards technological improvements in products, processes, and services that themselves may not be high-tech.

The standard shipping container is just an inert box, and most people rarely ever see one. It is not improving from one year to the next in any meaningful sense. The real innovation was in the process technologies enabled through this standardization, and the immense deflation derived through these technologies.

Malcolm McLean, a trucking tycoon, envisioned the idea of standardized container sizes, and generously decided to give his idea away for free rather than patent it and seek profit. After the first experiment was a success, rapid adoption and port standardization followed.

As we can see from the table (click to enlarge), the introduction of the shipping container swiftly led to an almost 20-fold increase in unloading rates from 1965 to 1970, an unusually rapid improvement of any productivity metric for such an early era. This increased speed led to larger ships, and this in turn led to larger and fewer ports. From an ATOM perspective, these productivity gains introduced a great deal of deflation in the prices of the goods themselves. A broader range of goods could be traded internationally, leading to many more countries being able to compete for the same export demand. New countries could merely join existing supply chains, rather that build entire industries from scratch. China's entry into international trade could not have been as rapid as it was, without the shipping container, and the advantages it conferred onto large countries over smaller ones, and to low cost production countries over expensive ones. This advantage is ongoing, as countries poorer than China are still in the process of integrating the low-hanging fruits of benefit that the shipping container provides.

Despite this introduction having begun almost 50 years ago, the full ATOM effect continues to increase. The precise logistics of the entire container-shipping ecosystem demands more powerful computation, sensors, and other innovations like RFID tags and GPS tracking. Furthermore, supply chains transporting trillions of dollars of goods each year generate a huge amount of data, which for the longest time was not even being utilized. Any large and ever-growing collection of data will attract Artificial Intelligence onto it, and this AI will generate additional productivity gains for participants in the supply chain, and hence price reductions for end-users.

Since shipping containers are produced in such volume, there are ideas emerging to use them elsewhere, such as a building block for modular construction, or as simple pop-in swimming pool enclosures.

For this reason, the shipping container, an inert metal box that transformed the entire award, receives the May 2017 ATOM AotM.

It is time for the ATOM AotM for April 2017, for which we return to an article I wrote way back in 2009. That article is titled 'The Publishing Disruption', and at the time of writing, we were on the brink of a transformation in content publication as seismic as the invention of the Gutenberg printing press. Since that time, the anticipated sequence of events unfolded as expected.

To excerpt from that article, consider how many centuries of background evolution occurred to get us to where we were in 2007 :

What a unique thing a book is. Made from a tree, it has a hundred or more flexible pages that contain written text, enabling the book to contain a large sum of information in a very small volume. Before paper, clay tablets, sheepskin parchment, and papyrus were all used to store information with far less efficiency. Paper itself was once so rare and valuable that the Emperor of China had guards stationed around his paper possessions.

Before the invention of the printing press, books were written by hand, and few outside of monastaries knew how to read. There were only a few thousand books in all of Europe in the 14th century. Charlemagne himself took great effort to learn how to read, but never managed to learn how to write, which still put him ahead of most kings of the time, who were generally illiterate.

But with the invention of the printing press by Johannes Gutenberg in the mid-15th century, it became possible to make multiple copies of the same book, and before long, the number of books in Europe increased from thousands to millions.

But then, note how incredibly low-tech and low-productivity the traditional publishing industry still was well into the 21st century :

Fast forward to the early 21st century, and books are still printed by the millions. Longtime readers of The Futurist know that I initially had written a book (2001-02), and sought to have it published the old-fashioned way. However, the publishing industry, and literary agents, were astonishingly low-tech. They did not use email, and required queries to be submitted via regular mail, with a self-addressed, stamped envelope included. So I had to pay postage in both directions, and wait several days for a round trip to hear their response. And this was just the literary agents. The actual publishing house, if they decide to accept your book, would still take 12 months to produce and distribute the book even after the manuscript was complete. Even then, royalties would be 10-15% of the retail price. This prospect did not seem compelling to me, and I chose to parse my book into this blog you see before you.

The refusal by the publishing industry to use email and other productivity-enhancing technologies as recently as 2003 kept their wages low. Editors always moaned that they worked 60 hours a week just to make $50,000 a year, the same as they made in 1970. My answer to them is that they have no basis to expect wage increases without increasing their productivity through technology.

An industry this far behind was just begging to be disrupted. As we have seen from the ATOM, the more overdue a particular disruption is, the more dramatic and swift the disruption when it eventually occurs, as the distance to travel just to revert to the trendline of that particular innovation, is great. Proceeding further in the original article :

The Amazon Kindle launched in late 2007 at the high price of $400. Many people feel that the appeal of holding a physical book in our hands cannot be replaced by a display screen, and take a cavalier attitude towards dismissing e-readers. The tune changes upon learning that the price of a book on an e-reader is just a third of what the paper form at a brick-and-mortar bookstore, with sales tax, would cost.

As of 2017, an entry-level Kindle 8 costs just $80 (with 3 GB of storage), yet is far more advanced than the $400 Kindle of 2007 (with just 250 MB of storage). Cumulative Kindle sales are estimated to be over 100 million units now.

But the Kindle hardware is not the real disruption, as it is a new purchase imposed on people who needed no such device to read paper books. The real ATOM disruption is in books themselves. Now, an author can publish directly on Kindle, and at a $10 sales price, immediately begins to receive a 70% royalty. Contrast that with the 10-15% royalty on a $20 sales price in traditional book publishing, that too after a 12-month waiting period even after the manuscript is complete. While bound books may still make sense for famous authors, the new market created by the Kindle has enabled the publication of many books that only expect to sell 10,000 copies. There is no material involved, so the production and distribution cost of any such publication has literally fallen by a factor of millions. A hefty cost is now no cost, precisely as the ATOM predicts.

2017 is the year where e-book sales have surpassed print and audio book sales, as per the chart. Since the previous article, brick and mortar bookstores have seen a torrent of closures. Borders Bookstores has completely shut down all of its 511 bookstores in the US. Barnes & Noble still exists, partly due to capturing the residual Borders revenue, but a growing share of B&N's in-store revenue is now from the coffee shop, magazines, and certain specialty book sales.

The unshackling of the bottom 99% of authors and aspiring authors from the extreme inefficiency of the traditional publishing industry has unleashed more content than was ever possible before, and is a market upgrade just as significant as that of the Gutenberg press in the 15th century. It is also a perfect demonstration of the accelerating rate of change, for while it took centuries for the diffusion of printed books to manifest, the e-book transformation was in mere years. For this reason, the Amazon Kindle and e-book ecosystem are the winner of April 2017's ATOM Award of the Month. I need more candidate submissions for future ATOM AotM awards.

There is an emerging paradox within the flow of technological diffusion. The paradox is, ironically, that rapid progress of technology has constrained its own ability to progress further.

What exactly is the meaning of this? As we see from Chapter 3 of the ATOM, all technological products currently amount to about 2% of GDP. The speed of diffusion is ever faster (see chart), and the average household is taking on an ever-widening range of rapidly advancing products and services.

Refer to the section from that chapter, about the number of technologically deflating nodes in the average US household by decade (easily verified by viewing any TV program from that decade), and a poll for readers to declare their own quantity of nodes. To revisit the same thing here :

Include : Actively used PCs, LED TVs and monitors, smartphones, tablets, game consoles, VR headsets, digital picture frames, LED light bulbs, home networking devices, laser printers, webcams, DVRs, Kindles, robotic toys, and every external storage device. Count each car as 1 node, even though modern cars may have $4000 of electronics in them.

Exclude : Old tube TVs, film cameras, individual software programs and video games, films on storage discs, any miscellaneous item valued at less than $5, or your washer/dryer/oven/clock radio just for having a digital display, as the product is not improving dramatically each year.

The estimation of results that this poll would have yielded by decade, for the US, is :

1970s and earlier : 0

1980s : 1-2

1990s : 2-4

2000s : 5-10

2010s : 12-30

2020s : 50-100

2030s : Hundreds?

Herein lies the problem for the average household. The cost to upgrade PCs, smartphones, networking equipment, TVs, storage, and in some cases the entire car, has become expensive. This can often run over $2000/year, and unsurprisingly, upgrades have been slowing.

The technology industry is hence a victim of its own success. By releasing products that cause so much deflation and hence low Nominal GDP growth and sluggish job growth, the technology industry has been constricting its own demand base. Amidst all the job-loss through technological automation, the hiring of the tech industry itself is constrained if fewer people can keep buying their products. If the bottom 70-80% of US household income brackets can no longer keep up with technological upgrades, their ability to keep up with new economic opportunities will suffer as well.

This is why monetization of technological progress into a dividend is crucial, which is where the ATOM Direct Universal Exponential Stipend (DUES) fits in. It is so much more than a mere 'basic income', since it is directly indexed to the exact speed to technological progress. As of April 2017, the estimated DUES amount in the US is $500/month (up from $400/month back in February 2016 when the ATOM was first published). A good portion of this cushion enables faster technology upgrades and more new adoption.

It is that time of the month again. For our third ever award of the ATOM AotM, we return to an article I wrote over 10 years ago about the lighting revolution. At that time, when the disruption was still in the future, I highlighted how the humble status of the light fixture leads to an associated disruption going widely unnoticed. That continues to be true even today, despite the important product transition that most people have already undertaken.

So the ATOM AotM award for March 2017 goes to the LED lightbulb. Something that most people do not even notice is a major engine of the ATOM, as it has introduced rapid price/performance improvements into what used to be a stagnant product.

Charge of the Light Brigade : Remember that the average household has about 25 light bulbs on average. From the chart, we can see that light output per until of energy and cost per watt of LED lighting are both improving rapidly, leading to a double-exponential effect. Lighting is hence now fully in the path of the ATOM and is seeing progress at a rate entirely beyond what the predecessor technology could have have experienced, and is indeed one of the fastest technology shifts ever (see the second chart). Bulbs are now purchased in packs of 4-12 units, rather than the single-unit purchases of the recent past. The expected electricity savings worldwide are estimated to be over $100 Billion per year in the near future.

The domino effects of this are immense. Follow the sequence of steps below :

LED bulbs are reducing the electricity consumed by lighting.

This reduction in demand more than accommodates the proliferation of electric cars. The first 100 million electric cars worldwide (a level we are still extremely far from) will merely offset the loss of electricity demand for lighting.

The spread of electric cars with no net rise in electricity consumption nonetheless reduces oil consumption and hence oil imports. The US already has a trade surplus with OPEC, for the first time in half a century, and this force is strengthening further. Even if the price per barrel of oil had not fallen through fracking, the number of imported barrels still would have plunged.

So even though most lighting is not fueled by oil, it created a puncture point through which a second-degree blow to oil demand arose.

That is truly amazing, making LED lighting not just a component of the ATOM but one of the largest disruptions currently underway.

That concludes this month's ATOM AotM. I need more reader submissions to ensure we have a good award each month.

When people think of FinTech, they think of a few things like peer-to-peer lending, payment companies, asset management firms, or maybe even cryptocurrencies. But one of the most outdated yet burdensome costs in all of finance, spread across the widest range of people, is still overlooked. The mortgage lending process is heavily padded with fees that are remnants of a bygone age.

First, we must begin with the effect of technology on short-term interest rates. The Fed Funds rate was close to zero for several years, and it is apparent that any brief increase in rates by the Federal Reserve will swiftly be reversed once markets punish the move in subsequent months. We are in an age of accelerating and exponential technological deflation, and not only will the Fed Funds rate have to be zero forever, but money-printing will be needed to offset deflation. This process has already been underway for years, and is not yet recognized as part of the long term trend of technological progress.

A 30-year mortgage was the standard format for decades, with a variable-rate mortgage seen as risky after a borrower locks in a low rate on their 30-year mortgage. But when the Fed Funds rate was at nearly zero, the LIBOR (London Interbank Offer Rate) hovered around 0.18% or so. If you get a variable-rate mortgage, then the rate is calculated off of the LIBOR, with an additional premium levied by the lending institution. This premium is about 1.5% or more. When the LIBOR rate was over 3% not too many years ago, the lender premium was only a third of the mortgage, but now, it is 85-90% of the mortgage. So instead of paying 0.18%, the lender pays 1.7%. This huge buffer represents one of the most attractive areas for FinTech to disrupt, as what was once a secondary cost is now the overwhelmingly dominant padding, itself a remnant of a bygone age.

When almost 90% of the interest charged in a mortgage merely represents the value that the lending institution provides, we can examine the components of this and see which of those could be replaced with a lower cost technological alternative. The lender, such as a major bank, provides a brand name, a mortgage officer to meet with face-to-face, and other such provisions. All of this is either unnecessary, or can be provided at much lower cost with the latest technologies. For example, blockchains can ensure the security aspects of the mortgage transaction are robust. Online consumer review services can provide an extra layer of reputational buttressing to any innovative new lending platform. The rationale for such a hefty mortgage markup over the underlying interest rate is just no longer there.

If the lender premium in a mortgage falls from 85-90% down to, say, 50%, then the rate on an adjustable rate mortgage will decline to just twice the LIBOR, or about 0.4%. Even thought the Federal Reserve has recently increased the Fed Funds rate, this is very temporary, and 0% will be the Fed Funds rate for the majority of the forseeable future, just as it has been for the last 9 years.

When this sort of ATOM-derived cost savings on interest payments percolates through the economy, it will cause a series of disruptions that will greatly reduce one of the last main consumer expenditures not yet being attacked by technology. Housing costs have risen above the inflation rate in many major cities, against the grain of technology. This is unnatural, since a home does not spontaneously renovate itself, get bigger, or otherwise increase in inherent value. On the contrary, the materials deteriorate over time, so the value should fall. Yet, home prices rise despite these structural forces, due to artificial decisions to restrict supply, lower bond yields through QE, etc. This artificial propping up of home prices masks the excessive costs in the industry, particularly in the mortgage-lending sector. As Fintech irons out the aforementioned outdated expenses in the mortgage-lending process, many fundamental assumptions about home ownership will change.

Home ownership is a very emotional concept for many buyers (which is why there is a widespread misconception that a person 'owns' their home even while they are making mortgage payments on it, when in reality, ownership is achieved only when the mortgage is fully paid off). This emotion obscures the high costs of obsolete products and procedures that continue to reside in the mortgage industry.

Amidst all the technological disruptions we have seen within the last generation, most people still don't understand that the central origin of most disruptions is an outdated, expensive incumbent system. But the FinTech wing of the ATOM has started the 'cracks in the dam' process against a very substantial and widely-levied cost, and this may be the disruption that brings FinTech's dividends to the masses.

With the new year, we are starting a new article series here at The Futurist. The theme will be a recognition of exceptional innovation. Candidates can be any industry, corporation, or individual that has created an innovation exemplifying the very best of technological disruption. The more ATOM principles exhibited in an innovation (rising living standards, deflation acting in proportion to prior inflation in the incumbent industry, rapid continuous technological improvement, etc.), the greater the chance of qualification.

The inaugural winner of the ATOM Award of the Month is the US hydraulic fracturing industry. While 'fracking' garnered the most news in 2011-13, the rapid technological improvements continued. Natural gas continues to hover around just $3, making the US one of the most competitive countries in industries where natural gas is a large input. Oil prices continue to fall due to ever-improving efficiencies, and from the chart, we can see how many of the largest fields have seen breakevens fall from $80 to under $40 in just the brief 2013-16 period. This is of profound importance, because now even $50 is a profitable price for US shale oil. There is no indication that this trend of lower breakeven prices has stopped. Keep in mind that the massive shale formations in California are not even being accessed yet due to radical obstruction, but a breakeven of $30 or lower ensure the pressure to extract this profit from the Monterrey shale continues to rise. Beyond that, Canada has not yet begun fracking of its own, and when it does, it will certainly have at least as much additional oil as the US found.

This increase, which is just an extra 3M barrels/day to US supply, was nonetheless enough to capsize this highly elastic market and crash world oil prices from $100+ to about $50. Given the improving breakevens, and possibility of new production, this will continue to pressure oil prices for the foreseeable future. This has led to the US turning the tables on OPEC and reversing a large trade deficit into what is now a surplus. If you told any of those 'peak oil' Malthusians that the US would soon have a trade surplus with OPEC, they would have branded you as a lunatic. Note how that ill-informed Maoist-Malthusian cult utterly vanished. Furthermore, this plunge in oil prices has strengthened the economies of other countries that import most of their oil, from Japan to India.

Under ATOM principles, technology always finds a way to lower the cost of something that has become artificially expensive and is hence obstructing the advancement of other technologies. Oil was a premier example of this, as almost all technological innovation is done in countries that have to import large portions of their oil, while almost none is done by oil exporters. Excess wealth accumulation by oil exporters was an anti-technology impediment, and demanded the attention of a good portion of the ATOM. Remember that the worldwide ATOM is of an ever rising size, and comprises of the sum total of all technological products in production at a given time (currently, about 2% of world GDP). Hence, all technological disruptions are interconnected, and when the ATOM is freed up from the completion of a certain disruption, that amount of disruptive capacity becomes available to tackle something new. Given the size of this disruption to oil prices and production geography, this occupied a large portion of the ATOM for a few years, which means a lot of ATOM capacity is now free to act elsewhere.

This concludes our very first ATOM AotM to kick off the new year. I need candidate submissions from readers in order to get a good pool to select from. Criteria include the size and scope of the disruption, how anti-technology the disrupted incumbent was, and an obvious improvement in the quality of a large number of lives through this disruption.

I came across some recent charts about the growth of these two unrelated sectors, one disrupting manufacturing, the other disrupting software of all types (click to enlarge). On one hand, each chart commits the common error of portraying smooth parabola growth, with no range of outcomes in the event of a recession (which will surely happen well within the 8-year timelines portrayed, most likely as soon as 2017). On the other hand, these charts provide reason to be excited about the speed of progress seen in these two highly disruptive technologies, which are core pillars of the ATOM.

This sort of growth rate across two quite unrelated sectors, while present in many prior disruptions, is often not noticed by most people, including those working in these particular fields. Remember, until recently, it took decades or even centuries to have disruptions of this scale, but now we see the same magnitude of transformation happen in mere years, and in many pockets of the economy. This supports the case that all technological disruptions are interconnected and the aggregate size of all disruptions can be calculated, which is a core tenet of the ATOM.

The recent FOMC meetings continue to feature a range of debate only around the rate at which the Fed Funds rate can be increased up to about 4% (which has not coincided with a robust economy since the late 1990s). They actually describe this as a 'normal' rate, and the process of raising the rate as 'normalization'. The 'Dot Plot' pictured here indicates the paradigm that the Federal Reserve still believes. Even the most 'dovish' members still think that the Fed Funds rate will be above 2% by 2019.

This is dangerously inaccurate. At the start of 2016, the Federal Reserve expected that they will do four rate likes this year itself. Now they are down to an expectation of just two (one more than the one early in this year), and may just halt with one. How can a collection of supposedly the best and wisest economic forecasters be so consistently wrong? A 20% stock market correction will lead to a swift rate reversal and a 25%+ correction will lead to a resumption of QE in excess of $100B/month.

The -2% indicated by the Wu-Xia shadow rate might be as deep as -4% by 2025, under current trends of technological diffusion. The worldwide central bank easing required to halt deflation by that time will be several times higher than today. As per the ATOM policy reform recommendations, this can be an exceptionally favorable thing if the fundamentals are recognized.

In the ATOM e-book, we examine how technological disruption can be measured, and how the aggregate disruption ongoing in the world at any given time continues along a smooth, exponentially rising trendline. Among these, certain disruptions are invisible to most onlookers, because a tangential technology is simultaneously disrupting seemingly unrelated industries from an orthogonal direction. In that vein, here are two separate lists of industries that are being disrupted, one by Deep Learning and the other by Blockchain.

Note how many industries are present in both of the above lists, meaning that the sectors have to deal with compound disruptions from more than one direction.

In addition, we see that sectors where disruption was artificially thwarted due to excessive regulation and government protectionism merely see a sharper disruption, higher up in the edifice. When the disruption arrives through abstract technologies such as Deep Learning and Blockchain, the incumbents are unlikely to be able to thwart it, due to the source of the disruption being effectively invisible to the untrained eye. What is understood by very few is that the accelerating rate of adoption/diffusion, depicted in this chart here from Blackrock, is enabled by such orthogonal forces that are not tied to any one product category or even industry.

To begin, refer to the vintage 2006 article where I estimated telescope power to be rising at a compound annual rate of approximately 26%/year, although that is a trendline of a staircase with very large steps. This, coincidentally, is exactly the same rate at which computer graphics technology advances, which also happens to be the square root of Moore's Law's rate of progress. According to this timeline, a wave of powerful telescopes arriving now happens to be right on schedule. Secondly, refer to one of the very best articles on The Futurist, titled 'SETI and the Singularity', where the impact of increasing telescopic power is examined. The exponential increase in the detection of exoplanets (chart from Wikipedia), and the implications for the Drake Equation, are measured, with a major prediction about extraterrestrial life contained therein.

The best news of the last month was something that most people entirely missed. Amidst all the distractions and noise that comprises modern media, a quiet press release discloses that a supercomputer has suddenly become more effective than human doctors in diagnosing certain types of ailments.

This is exceptionally important. As previously detailed in Chapter 3 of The ATOM, not only was a machine more competent than an entire group of physicians, but the machine continues to improve as more patients use it, which in turn makes it more attractive to use, which enables the accrual of even more data upon which to improve further.

But most importantly, a supercomputer like Watson can treat patients in hundreds of locations in the same day via a network connection, and without appointments that have to be made weeks in advance. Hence, such a machine replaces not one, but hundreds of doctors. Furthermore, it takes very little time to produce more Watsons, but it takes 30+ years to produce a doctor from birth, among the small fraction of humans with the intellectual ability to even become a physician. The economies of scale relative to the present doctor-patient model are simply astonishing, and there is no reason that 60-80% of diagnostic work done by physicians cannot soon be replaced by artificial intelligence. This does not mean that physicians will start facing mass unemployment, but rather than the best among them will be able to focus on more challenging problems. The most business-minded of physicians can incorporate AI into their practice to see a greater volume of patients on more complicated ailments.

This is yet another manifestation of various ATOM principles, from technologies endlessly crushing the cost of anything overpriced, to self-reinforcing improvement of deep learning.

In the ATOM, I have written at length about why, barring a substantial increase in the size and directness of worldwide central bank money creation, we are going to enter a major financial crisis as soon as 2017. Among the list of factors contributing to this impending crisis, one that the public seems to be in denial of is the perilous state of the federal budget balance.

The budget deficit governs the rate at which the national debt rises. The interest on the debt is a component of federal expenditure and contributes to the deficit which gets added to the debt which generates more interest. None of that is new, but what is new is how a -3% deficit exists even this late into the economic expansion, and after millions of jobs have been created. This deficit looks good when compared to what it was during the depths of 2009, but that is not the correct apples-to-apples comparison, as we see in the chart.

This is not a problem yet, but almost no one realizes that the buffer that the US has long enjoyed is now gone, and that if a shock were to arise, then it will hence be that much more severe. The trend is towards a very ominous explosion in the deficit when the next recession hits. Even worse, the traditional method of QE will not work this time. A more direct form of QE is the only solution.

In ATOM terms, the progress of Tesla is an example of everything from how all technological disruptions are interlinked, to how each disruption is deflationary in nature. It is not just about the early progress towards electric cars, removal of the dealership layer of distribution, or the recent erratic progress of semi-autonomous driving. Among other things, Tesla has introduced lower-key but huge innovations such as remote wireless software upgrades of the customer fleet, which itself is a paradigm shift towards rapidly-iterating product improvement. In true ATOM form, the accelerating rate of technological change is beginning to sweep the automobile along with it.

When Tesla eventually manages to release a sub-$35,000 vehicle, the precedents set in dealership displacement, continual wireless upgrades, and semi-autonomous driving will suddenly all be available across hundreds of thousands of cars, surprising unprepared observers but proceeding precisely along the expected ATOM trajectory.

However, there may be more nuances to this concept than previously addressed. It may be that since GDP is a human construct, it only happens to be correlated to the accelerating rate of change by virtue of humans being the forefront of advancing intelligence. It could be that once artificial intelligence can advance without human assistance, most types of technology that improve human living standards may stagnate, since the grand goal of propagating AI into space is no longer bottlenecked by human progress. Humans are certainly not the final state of evolution, as evidenced by the much greater suitability of AI for space exploration (AI does not require air or water, etc.).

That is certainly something to think about. Human progress may only be on an accelerating curve until a handoff to AI is completed. After that, metrics quite different than GDP may be the best to measure progress, as the AI perhaps only cares about computational density, TERAFLOPs, etc.

I am unveiling 'The ATOM', a 14-chapter e-book that contains novel concepts, research, and policy prescriptions about the various effects of technological progress on the economy and society. You can go over to the e-book and start reading and commenting there. Blog posts on The Futurist will now be related to ATOM-affiliated concepts.

The e-book is published in blog format, so that comments can accrue underneath each chapter, and future blog posts can link to specific parts of the e-book. Videos at the start of each chapter serve as summaries for those who do not wish to read a wall of text in order to get a synopsis. Go over there and read it, chapter by chapter, up and down. You will never see the world quite the same way again.